An Overview of Fractal Bitcoin and Its Ecological Projects

Blockchain technology continues to advance, and Bitcoin, as the earliest and most widely accepted cryptocurrency, still plays a significant role globally.

However, with the proliferation of its network, scalability issues have gradually emerged, with bottlenecks such as slow transaction confirmation speeds and limited processing capabilities becoming urgent challenges that need to be addressed. To this end, Fractal Bitcoin was launched by UniSat on September 9, 2024, as an innovative Layer 1 solution aimed at tackling these pain points and providing robust technical support for the future of Bitcoin.

Although Fractal Bitcoin captured a significant portion of Bitcoin's hash power within just a few days of its release, it remains relatively unfamiliar to most of the crypto community.

In this issue, let's take a closer look at Fractal Bitcoin and its ecosystem projects.

Fractal Bitcoin

Fractal Bitcoin is a Layer 1 solution specifically designed to scale the Bitcoin network. Unlike other scaling technologies, Fractal Bitcoin employs a tree-like recursive expansion layer structure (BCSP, or Blockchain Scaling Protocol) to enhance Bitcoin's transaction processing speed and efficiency by adding layers. This architecture can improve network scalability and achieve higher transaction throughput without altering the core Bitcoin protocol.

The greatest advantage of Fractal Bitcoin is its complete compatibility with the existing Bitcoin ecosystem, requiring no large-scale adjustments to the original network. This means that users and developers can continue to use existing tools and devices without worrying about compatibility issues. Additionally, Fractal Bitcoin supports permissionless mining and merged mining, providing miners with more opportunities to participate, further enhancing the network's security and decentralization.

To understand the innovations of Fractal Bitcoin, we first need to review the historical context of Bitcoin's scalability discussions. In 2017, the Segregated Witness (SegWit) soft fork aimed to increase Bitcoin's block capacity, while the subsequent hard fork of Bitcoin Cash (BCH) provided another scaling solution, although it sparked some controversy. By 2018, second-layer solutions—such as the Lightning Network—gained increasing attention. Throughout this process, Fractal Bitcoin currently uses a tree-like recursive structure as a new attempt, proposing a different solution to the long-standing issue of Bitcoin scalability.

As the latest step in exploration, Fractal Bitcoin has performed excellently since its launch. According to previously provided data, within just 24 hours, the merged mining hash power of Fractal Bitcoin accounted for over 40% of the total hash power of the Bitcoin network. Moreover, the hash power from permissionless mining reached 2%, a figure that is even three times that of Bitcoin Cash's total hash power. These figures indicate that Fractal Bitcoin has already gained recognition among miners.

Due to the ability to mine both coins, the emergence of Fractal Bitcoin has attracted participation from several mining pools, including F2Pool, Antpool, and Spiderpool. However, while the number of participants in the Fractal Bitcoin mining network is still increasing, the future development direction and expansion potential remain to be explored. Additionally, as the early wealth effect has already manifested, investors looking to enter during this round of non-overlapping bull markets should remain rational and not be swayed by FOMO emotions.

Core Advantages of Fractal Bitcoin

Fractal Bitcoin introduces several key technological innovations:

• Block Time: Fractal Bitcoin reduces the block generation time to 30 seconds, a significant improvement compared to Bitcoin's 10 minutes. This faster block time can accelerate transaction confirmations and greatly enhance user experience. Additionally, it significantly increases the overall throughput of the network, making it more capable of supporting complex, high-volume application scenarios.

• Mining Mechanism: Fractal Bitcoin adopts a unique hybrid mining model. Out of every three blocks, two are mined permissionlessly, while one is mined in conjunction with Bitcoin. This innovative mechanism allows individual miners to freely participate in two-thirds of the blocks, promoting decentralization of the network. At the same time, by merging mining every third block, it leverages Bitcoin's powerful hash rate to enhance the network's security. This balanced approach ensures security while incentivizing Bitcoin miners to support the Fractal Bitcoin network.

• Scalability: The tree-like architecture of Fractal Bitcoin theoretically supports unlimited levels of expansion. Each layer increases capacity by 20 times compared to Bitcoin, meaning the first layer has a capacity 20 times that of Bitcoin, and the second layer reaches 400 times. Through this exponential scaling model, Fractal Bitcoin can address the throughput limitations of the Bitcoin network while retaining the security of the base layer.

• Smart Contract Functionality: By introducing the OP CAT opcode, Fractal Bitcoin achieves Turing-complete smart contracts on the Bitcoin platform. A simple concatenation operation with OP CAT, combined with other opcodes, can construct replicated smart contract logic. This makes advanced DeFi protocols, complex NFT mechanisms, and decentralized applications previously limited to the Ethereum platform possible.

• Parallel Execution: The architecture of Fractal Bitcoin allows different applications to run their own instances, so specific optimizations do not affect the entire network. For example, gaming platforms can operate on a Fractal layer optimized for high-frequency, low-value transactions, while DeFi protocols can handle financial operations on independently tuned layers.

• Compatibility: Fractal Bitcoin is fully compatible with Bitcoin standards (such as BRC-20 and Ordinals), ensuring that existing Bitcoin tokens and NFTs run seamlessly. Additionally, users can use the same address between the Bitcoin mainnet and Fractal Bitcoin, simplifying the user experience and reducing the risk of errors in address management.

In summary, Fractal Bitcoin is a fork based on Bitcoin Core v24.0.1 and can be viewed as a small Bitcoin chain with adjusted parameters. Its main differences include block time, difficulty adjustment mechanism, total token supply (Fractal Bitcoin sets the total token supply at 210 million), initial block rewards, halving cycles, and the activation of the OP CAT opcode.

However, seasoned investors should be aware that one should not hold too much faith in technology, as none of the previously forked coins have yielded good results.

Fractal Bitcoin Economic Model

The token symbol for Fractal Bitcoin is FB. The total supply of FB tokens is 210 million, with the following specific distribution:

Proof of Work (PoW) mining 50%, ecosystem treasury 15%, community grants 10%, presale 5%, advisors 5%, core contributors 15%. Among these, the distribution cap for the ecosystem treasury and community grants is 10% of the total distribution per year, with a distribution period of 10 years; the distribution cap for advisors is 20% of the total distribution per year, with a distribution period of 5 years.

This distribution method aims to provide long-term support and sustainable development for the Fractal ecosystem.

Background of Fractal Bitcoin

According to Rootdata, Fractal Bitcoin was developed by the Unisat team. UniSat has received multiple rounds of funding, including from Binance and OKX Ventures. Fractal Bitcoin was jointly launched by the UniSat team, BSF, Uniworlds, and Asset Bridge, in collaboration with Binance Labs, the Binance incubator.

UniSat: As a leading Bitcoin wallet, UniSat has over 900,000 weekly active users. The team has extensive experience in cryptocurrency application interface design, implementing and supporting Bitcoin standards (such as BRC-20 and Ordinals), and securely managing high-value digital assets. Their involvement not only adds credibility to the project but also provides a broad potential user base for early adopters.

Block Space Force: Its co-founders have successfully built and scaled multiple world-class projects, such as Coinbase, CoinMarketCap, and Cobo. With decades of experience, they have demonstrated deep expertise in blockchain project development from concept to large-scale adoption, addressing regulatory challenges in the cryptocurrency space, and managing investor relations. Their achievements in dollar A9 exits and investing in 100x projects further validate their capabilities.

Fractal Bitcoin Ecosystem Projects

1. Cat Protocol

According to the official introduction of the CAT Protocol project, CAT Protocol is a new Bitcoin token protocol based on UTXO, called Covenant Attested Token (CAT). The protocol is verified by miners and uses smart contracts to manage the minting and transfer of tokens. Its main features include:

• No Indexer Required: The rules for the tokens are guaranteed by the Bitcoin consensus mechanism, with all data and logic running on-chain without relying on off-chain third parties (such as indexers). It inherits the native proof-of-work security of Bitcoin.

• Modular: CAT tokens can be used to build other smart contracts, supporting more complex decentralized applications (such as AMM, lending, staking, etc.). This provides powerful new tools for expanding the application scope of Bitcoin.

• Programmable Minting: The rules for token minting are executed by smart contracts, and any minting transaction that exceeds the stipulated rules will be directly rejected by the network.

• Cross-Chain Interoperability: The CAT protocol supports trustless asset bridging between different blockchains, allowing applications to run across multiple blockchains.

• SPV Compatibility: CAT tokens support Simplified Payment Verification (SPV), enabling light clients to independently verify the authenticity of tokens without relying on a central server.

The CAT protocol supports fungible tokens (CAT-20 standard) and non-fungible tokens (CAT-721 standard), with CAT-721 yet to be launched.

As of the time of writing, the popularity of CAT20 tokens remains high, with a minting progress of 74%, and many are rushing to CAT. However, it is worth noting that traces of domestic development have been found in the code of the CAT Protocol, and the project team remains anonymous, with specific information about team members yet to be tracked down.

2. Pizza Swap

Pizza Swap is a decentralized trading service on the UniSat platform, operating on the Fractal Testnet. It allows users to conveniently exchange, deposit, and manage assets.

3. Uni Worlds

Uni Worlds positions itself as the gaming infrastructure within the Bitcoin ecosystem and is the first project built on Fractal Bitcoin, fully supported by UniSat. Currently, it has issued two assets: Uni Worlds Genesis Series and Uni Worlds: Key Of Destiny Series, with keys that can mine FBTC.

Uni Worlds employs Fractal Bitcoin technology, which may refer to the implementation of layered or sharded technology on the Bitcoin network, aimed at enhancing the network's scalability and functionality.

The team is headquartered in Singapore and focuses on the development of the Bitcoin ecosystem while actively laying out multiple Web3 fields, including Layer 2 solutions (L2), DeFi, GameFi, AI, and the metaverse.

4. Satspump.fun

Satspump.fun is positioned as a Bitcoin meme coin issuance platform, providing users with a fun and creative new space. Here, users can easily issue meme coins on Fractal Bitcoin, unleashing their creativity and imagination. The platform is characterized by its principle of fair issuance: no presale and no team allocation. This mechanism aims to allow users to experience token issuance and trading similar to that on Solana and other EVM chains. Its fairness and openness have attracted many users to participate, bringing new vitality to the Bitcoin ecosystem.

5. Infinity AI

InfinityAI is an AIGC platform within the Fractal Bitcoin ecosystem, providing users with a new creative experience and limitless possibilities. Similar to traditional AIGC platforms, users can generate new images and NFTs by inputting text or image prompts. This innovative feature not only meets users' creative needs but also brings more artistic and creative elements to the Fractal Bitcoin ecosystem.

Conclusion

Fractal Bitcoin, as a new type of Bitcoin scaling solution, indeed provides new imagination and traffic for the Bitcoin ecosystem. It addresses network expansion issues by proposing a tree-like recursive expansion layer structure to enhance the scalability and throughput of the Bitcoin network, while the permissionless mining mechanism brings economic benefits to miners in the current short bear market, thereby improving the network's security and decentralization.

However, as a forked network of Bitcoin, based on past experiences, the long-term benefits remain to be evaluated, while short-term economic benefits may be fully divided. Therefore, investors should carefully consider whether to enter Fractal Bitcoin.

Nonetheless, it cannot be ruled out that subsequent projects may pave the way for Fractal Bitcoin's ascent, as there may still be promising projects to be incubated in the future ecosystem that could solidify and enhance the price of Fractal Bitcoin. All of this will depend on how the project team navigates the entire landscape, and we will wait and see.